Wondering if there is anyone on here that has retired early (FIRE Movement)

[Elite]

I'm 43 now and I started working towards retirement a few years ago. I think I can have my basic expenses covered in 2-3 more years.

I sold my house in Oregon and moved to Tulsa. I purchased my current home with cash and have started buying rental properties. I looked at the fire movement a lot and saving money and putting it into VTSAX would have taken too long. Since moving I'm looking into draining my retirement to purchase more rentals. Why live off 4% when you can live off 12% that you can get from rentals.

I have also been looking into rentals. I can’t seem to make the numbers work for my area. What kind of positive cash flow are you looking for before purchasing


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[Dos Perros]

One thing I think is worth mentioning, is that if you're even thinking about, planning for, and taking action towards retirement you are sadly in a league of your own. So many of our countrymen don't even do that. I feel sorry for them, but worse, fear they could end up on government programs when it could have been avoided.

On that note, someone close to me did an audit of 401k contributions across their entire mid-size company. It is incredibly sad how many people don't even take advantage of the match. Even people making 6 figures contributing zero. And most people who make good money, like more than the county household income, contributing nothing or very little.

 

[ianpadron]

Well that's not true.

"Because you already paid taxes on the money you’ve contributed to a Roth IRA, you can withdraw your contributions any time, without penalty."

Roth IRA Withdrawal Rules: Timing Makes a Difference - NerdWallet

In general, two criteria need to be met for penalty-free withdrawals of all funds from a Roth IRA: the account has been open for at least five years and the account owner is age 59 ½ or older.

www.nerdwallet.com

You can do the same thing with your basis in a brokerage account, except you can also touch the gains, and only pay cap gains tax instead of tax+penalty.

Being penalized to touch any earnings prior to year 59.5 makes very little sense with regards to the FIRE movement this entire thread is based on.

If the intent is to be nimble with money and maximize its velocity, for the millionth time, a Roth anything isn't the right tool.

 

[Dos Perros]

You can do the same thing with your basis in a brokerage account, except you can also touch the gains, and only pay cap gains tax instead of tax+penalty.

Being penalized to touch any earnings prior to year 59.5 makes very little sense with regards to the FIRE movement this entire thread is based on.

If the intent is to be nimble with money and maximize its velocity, for the millionth time, a Roth anything isn't the right tool.

You're refuting facts I shared with opinion. They can certainly have a purpose, and do have some advantages over a brokerage account. I think (opinion) if you're not doing both you're likely wrong.

 

[displacedtexan]

We have very different goals but likely same paths. We have a goal to be able to donate $1 mill a year in perpetuity. Even thought we have only been sitting at 100k giving the last couple of years...i love the game on constantly finding ways to increase.

Small business acquisition, real estate, various funds, etc. Many ways to get there, but they are all about doing the work. Find something you enjoy and go after it. Fall in love with the process.

Key is to enjoy the entire process because you are spending time doing it!! Make a priority list and filter things through it. You only have one life and honestly years of work "could" be wiped away by something out of your control.

Don't hurt yourself patting your own back.

 

[CorbLand]

One thing I think is worth mentioning, is that if you're even thinking about, planning for, and taking action towards retirement you are sadly in a league of your own. So many of our countrymen don't even do that. I feel sorry for them, but worse, fear they could end up on government programs when it could have been avoided.

On that note, someone close to me did an audit of 401k contributions across their entire mid-size company. It is incredibly sad how many people don't even take advantage of the match. Even people making 6 figures contributing zero. And most people who make good money, like more than the county household income, contributing nothing or very little.

Its going to be interesting to see what happens in the coming years with the baby boomer generation retiring. Many of them havent saved enough for retirement. Could get a little dicey.

 

[MCS]

I don't plan to get to retire super early despite saving very aggressively. We simply spend too much enjoying life while we are young(ish). But I'm all about diversification so I'm genuinely intrigued by this overwhelming confidence in real estate. Question: What about for states like Texas with outrageous and suffocating property taxes?

finding a cash flowing single family house in Texas is almost impossibile. I do know some guys that do well in multi family in texas. The guys I know that have a bunch of single family homes in texas purchased them in houston before prices and interest rates went up.

 

[eamyrick]

For those who retired early could you please speak to how you handled health insurance? My wife and I are healthy now and we wondered what others were doing for insurance.

A lot of gov plans allow you continued access to health benefits. I currently pay $660 a month for wife and two kids. At retirement the number is $1000 per month. As long as the wife keeps minimal coverage such as $5 vision she can come back to the plan forever even if she uses other insurance. I factored the increasing costs of insurance into my retirement savings.

 

[JakeSCH]

Don't hurt yourself patting your own back.

That was not my intent. I see how it would have been better as a PM to the author.

 

[MCS]

I have also been looking into rentals. I can’t seem to make the numbers work for my area. What kind of positive cash flow are you looking for before purchasing


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I want a 8% cash on cash return after taking 8 % for propery management and 15% for repairs and vacancy. Plus taxes and insurance. It has been really hard to find in the better neighborhoods since interest rates and prices went up.

In the c class properties I want a 12% cash on cash return. I won't buy a house in a D class neighborhood.

 

[ianpadron]

That was not my intent. I see how it would have been better as a PM to the author.

Money-talk makes guys squirm because their relationship with it is broken.

I'm sure many of us read your post as nothing but motivation and proof of what's possible.

$1M per year in charitable giving is straight up rad!

 

[MCS]

I have also been looking into rentals. I can’t seem to make the numbers work for my area. What kind of positive cash flow are you looking for before purchasing


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What market are you in?

 

[eamyrick]

That was not my intent. I see how it would have been better as a PM to the author.

I dig it man. One of my goals for early retirement is spend the free time and skills giving back

 

[Fullfan]

Retired at 49,9 years ago. Retirement is busy…

 

[ianpadron]

You're refuting facts I shared with opinion. They can certainly have a purpose, and do have some advantages over a brokerage account. I think (opinion) if you're not doing both you're likely wrong.

How does handicapping yourself with a Roth fit into the FIRE strategy that this entire thread is based on?

Pretty sure that it's objectively true that tying your returns up in Roth jail til age 59.5 is the antithesis of setting yourself up with accessible and renewable cash-flow to serve as retirement income...

That isn't my opinion. You can't touch the returns til almost 60, while countless alternatives exist where you can...

I have a Roth, it's a remnant of my first 2 years in the work force. I wish I could cash the last little bit of earnings out and throw it directly into another down-payment...but unless I decide to pay the penalty+tax on it, it would literally be stuck in jail for another 30 years growing at the speed of smell lol

If this thread was titled, "Has anyone retired at age 60?"...then hell yeah bro, Roth it up!

 

[ianpadron]

One thing I think is worth mentioning, is that if you're even thinking about, planning for, and taking action towards retirement you are sadly in a league of your own. So many of our countrymen don't even do that. I feel sorry for them, but worse, fear they could end up on government programs when it could have been avoided.

On that note, someone close to me did an audit of 401k contributions across their entire mid-size company. It is incredibly sad how many people don't even take advantage of the match. Even people making 6 figures contributing zero. And most people who make good money, like more than the county household income, contributing nothing or very little.

Very true, and very scary.

The stats that stick with me are the Bankrate number that always hovers around 60% of Americans being unable to front $1,000 for an unexpected expense, and roughly half of private sector employees having ZERO plan for retirement...not sub-optimal plan, a non-existent plan...

We call ourselves the greatest, most prosperous nation the world has ever known...yet we still have the vast majority of our citizens financially illiterate.

The fix for which is likely a new 50+ page thread of its own.

I'm sure that everyone in this thread would enjoy sitting around a fire at deer camp talking personal finance, regardless of personal differences/opinions.

 

[displacedtexan]

That was not my intent. I see how it would have been better as a PM to the author.

Or just leave out how you're only able to give away $100k a year...

 

[svivian]

Or just leave out how you're only able to give away $100k a year...

I think its great he mentioned it, encourages others to do the same.

 

[dreamingWest]

I don't agree about the anti-Roth regardless if you're going heavy into RE. It's only $6500/year. Most serious FIRE guys can probably come up with that and why not go ahead and have those nice tax fee earnings when they turn 59.5. FIRE guys want to live that long too. Use multiple financial vehicles to fund your long retirement. I don't think you have to be anti Roth when you're talking FIRE and super confident in all that easy RE money.

 

[Crowmangler]

I'm sure that everyone in this thread would enjoy sitting around a fire at deer camp talking personal finance, regardless of personal differences/opinions.

You couldn't be more wrong if you tried. That's the last damn thing I wanna talk about around a camp fire